Fight launched for lost millions

The pension fund representing more than 200,000 West Midland council workers has launched a legal battle to retrieve millions lost when shares in an American computer giant tumbled.

Wolverhampton City Council, trustee of the West Midlands Metropolitan Authority Pensions Fund, is suing computer giants Dell and Intel and accountants Price Waterhouse Coopers. The alleged fraud has been described by the city council's American lawyers as "one of the largest insider trading pump-and-dumps in history". Lawyers Lerach Coughlin Stoia Geller Rudman & Robbins revealed the council fund and another American holding lost around $6 million dollars, more than £3 million, when shares in Dell slumped last year.

The West Midlands Metropolitan Authority fund has £6.9 billion of assets and looks after 219,716 people. Bosses said today it currently holds 82,100 shares in Dell, valued at approximately £1million.

Tim Clark, council spokesman for the fund, said: "Lerach has identified the actions of Dell do not best serve the shareholder interests of the West Midlands Pension Fund and is taking forward the fund's interests in legal action."

California-based Lerach claims the fund bought Dell stock at artificially inflated prices and was damaged by subsequent falls.

It added Dell bosses assured investors about the company's financial health, which boosted share prices, while at the same time pocketing millions by selling stock - so-called pump-and-dump.

The suit also says America's second biggest computer maker depended on hundreds of millions of dollars of secret rebates from supplier Intel to boost profits.

Price Waterhouse Coopers has been cited for failing to pick up the problems when it audited Dell's accounts.

The 252-page claim was filed on January 31 at a district court in Austin, Texas.

Dell spokesman Bob Pearson and David Nestor, from PWC, refused to comment on the litigation.

But Chuck Mulloy, from Intel, said: "We deny the plaintiffs' allegations and plan to move quickly to defend ourselves."

By Stuart Pollitt